PPACAPatient Protection & Affordable           Care Act       Born March 23, 2010
A Cursory Look at PPACAPatient Protection and Affordable Care Act by Alan W. Gallagher, CES, ACBC, LTCP     Licensed Insur...
Disclaimer . . .Whereas the Patient Protection and Affordable CareAct (PPACA) is overly complex and lengthy; andWhereas th...
Before PPACA became law . . .  House Speaker Nancy Pelosi told  an audience-     audience-  “pass the bill so you can find...
Baucus Indicates He Did Not    Read Entire Healthcare BillThe Hill (8/26, Fabian) reports in its Blog Briefing Room,      ...
PPACA Did Reform Health-Care                 Health- Do you believe that PPACA will Stop the Spiraling Cost of Health-Care...
Patient Protection and Affordable Care Act (PPACA)Officially Known as: Public Law 111-148Regulations will be issued in sev...
An Explanation Was Ordered ofHow the New Law Will WorkIn an effort to gain some understanding of thenew health care law, C...
PPACA aka - Affordable Care Act  There are new fees, bureaucracies, and    programs to pay for what it created-        159...
PPACA Undermines theConcept of InsuranceThe purpose of insurance is to protect you froma Huge, Unlikely, and Unpredictable...
How Insurance is Suppose to Work If you purchase homeowners insurance for say, $500 per year, so that you will be reimburs...
Health Insurance Mindset Today That is how insurance works for most things, but it is not how it works in the U.S. for mos...
PPACA-Undermines the Very Concept of Insurance PPACA is more like Pre-Paying for Health Care than it is about making Healt...
The UninsuredThats What it Was Suppose to be           All About! How Many Are There Really?
The Primary Reason for Health CareReform – Was to Cover the Uninsured Through out the health care debate, the "Majority Pa...
Understanding Who is Uninsured . . .So who makes up those counted asuninsured in America?9.7 million or 21% earn more than...
Understanding Who is Uninsured . . .Who makes up those counted continued-                           continued-6 million ar...
Understanding Who is Uninsured . . .    Assuming some overlap with the numbers, there are at most 10 million U.S. Citizens...
The Timeline for Implementing Reforms     Beginning 23 Sept 2010 through 2018
PPACA - Reforms in 2010▪No lifetime benefit limits1       -based on dollar amounts▪No coverage rescissions/cancellations2 ...
PPACA - Reforms in 2010▪ Must have dependent coverage up to age 26▪ No pre-existing condition      exclusions   for  depen...
PPACA Reforms in 2012   All plans must provide new summary of   benefits to enrollees at specified times.   –   Can be no ...
Summary of Changes to PPACA—                         PPACA—     First Anniversary EditionMarch 2011 marked the one-yearone...
Changes Announced in April 2011Repeal of Form 1099 Filing Requirement The requirement that businesses report on Form 1099 ...
Changes Announced in April 2011Elimination ofFree Choice Voucher RequirementThe requirement that employers offeringhealth ...
Changes Announced in April 2011Early Retiree Reinsurance ProgramStops Accepting New ApplicationsEffective May 6th, 2011- t...
Changes Announced in March 2011 Relief from Reporting Employer-Sponsored                       Employer- Health Coverage o...
Changes Announced in March 2011Enforcement Grace Periods for Select InternalClaims and Appeals ProceduresThe Department of...
Changes Announced in         December 2010Nondiscrimination          RequirementsDelayed for Insured Group HealthPlans - T...
Changes Announced in         November 2010Group Health Plans May ChangeHealth Insurance Issuers WithoutLosing Grandfather ...
PPACA Changes Medicare Too!Mostly by Reductions in Funding
Medicare Will Fund More ThanHalf the Cost of PPACA!  According to the CBO, PPACA will cost $938  Billion over the next dec...
CBO Letter to Senator Reid- re: Medicare Cuts to Fund PPACA                      Reid-
PPACA- Seniors Hit Hard*Medicare Actuary Rick Foster confirmed that thehealth overhaul law will result in "less generousbe...
Government MandatesBenefits that Must be Included in All Health Insurance Policies
Government Minimum CoverageMandates, Cause Maximum Cost Government regulations governing health insurance dictate what peo...
The Number of Government MandatesIs Ever Increasing! In 1979, there were just 252 mandates in place through out the U.S.- ...
PPACA-Mandates Preventative Care at "No Cost!" PPACA Mandates that all insurance policies not only cover preventative care...
Examples of Government Mandates forHealth Insurance Policies*  In vitro fertilization  Contraceptives  Breast Reduction Su...
Why Mandates Dont Make SenseOne Size Does Not Fit All! Not everyone wantsall that coverage; certainly not a 25 year oldinv...
The Great Grant Give-Away                Give-PPACA Authorizes 100s of Million$ in Discretionary Grants by HHS
HHS Grants So Far in 2011
HHS Grants 2011 Continued
$40 Million Grant for Prevention           Programs
HHS Awards $159.1 Million, to Support  Health Care Workforce Training
Waivers?Which part of PPACA authorizedWaivers? . . . Were still looking!
Congressman Ryan: Waivers "A Devastating    Indictment" Of Healthcare Law . . . CQ      (5/17,            17,  Adams,     ...
Nevada Receives Health Reform           Waiver The Las Vegas Sun (5/17, Demirjian)                            17,reports, ...
Nursing Home Industry Seeking   Waiver From Healthcare Law The National Journal (5/17, Fung,                              ...
HHS Secretary Scolds Insurers . . .  "Dont Blame PPACA for Rate            Increases!"
PPACA Already Causing HigherPremiums and Most Likely Less  Medical Care in the Future!
Under PPACA- Medicaid Will Expand      PPACA- Likely Causing Your Premiums to Increase!It has already been reported manyti...
The $6-an-Hour Health Minimum Wage*      $6-an-                    Wage*  Most people intuitively know that the worst thin...
PPACA-  PPACA- Keeping Employers from Hiring*     Job-killing mandates: The U.S.     Job-          mandates:     Chamber o...
PPACA- PPACA- Already Causing Loss ofGroup Sponsored Health Insurance* Millions    losing     coverage:                   ...
McKinsey: One-third of employers             One-     will drop health coverageAn early-2011 survey of more than 1,300 emp...
Some of What We Did Not Discuss– Pennsylvanias PPACA Guaranteed Issue  Plans– The Exchanges– Mandatory Coverage– Medicare ...
Do You Believe PPACA is Good for . . .  You and your family?  The American Workers?  Our Countrys Small Employers?  The Co...
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  1. 1. PPACAPatient Protection & Affordable Care Act Born March 23, 2010
  2. 2. A Cursory Look at PPACAPatient Protection and Affordable Care Act by Alan W. Gallagher, CES, ACBC, LTCP Licensed Insurance Producer
  3. 3. Disclaimer . . .Whereas the Patient Protection and Affordable CareAct (PPACA) is overly complex and lengthy; andWhereas the time allotted for this presentation islimited;It is therefore understood that this presentation ismerely a simplified, cursory overview of PPACA!Additionally, I do NOT in any way, shape or formmean to imply that I am an Expert on PPACA. Inreality, I suspect No One can be, given its volumeand complexity; and the fact it has yet to becompletely put into Federal Regulations.
  4. 4. Before PPACA became law . . . House Speaker Nancy Pelosi told an audience- audience- “pass the bill so you can find out what’s in it, away from the fog of controversy. controversy.”**As reported Kevin Hassett, August 1, 2010; Bloomberg Opinion
  5. 5. Baucus Indicates He Did Not Read Entire Healthcare BillThe Hill (8/26, Fabian) reports in its Blog Briefing Room, 26,"Senate Finance Committee Chairman Max Baucus(D-Mont.), one of the chief authors of the healthcare law,(D-Mont.suggested Tuesday he did not read the entire piece oflegislation.legislation. Speaking at a forum in his home state, Baucusand Health and Human Services Secretary KathleenSebelius were asked by an audience member if they hadread the whole bill and if not, that is the most despicable,irresponsible thing." Baucus stated, "I dont think you thing.want me to waste my time to read every page of thehealthcare bill," although his office later said, "There issimply no question that he understands the provisions inthe health care law and knows it is a historic improvementthat will make our health care system more affordable andaccessible for families." families.
  6. 6. PPACA Did Reform Health-Care Health- Do you believe that PPACA will Stop the Spiraling Cost of Health-Care? Health- If you are a business owner, do you believe PPACA will save you money on the cost of your group health insurance? If you are on Medicare, do you believe PPACA will Save You Money on the cost of your healthcare? You be the Judge!
  7. 7. Patient Protection and Affordable Care Act (PPACA)Officially Known as: Public Law 111-148Regulations will be issued in several phases, overthe next four years by 3 Federal Departments!The Department of Health & Human Services (HHS)The Department of Labor (DOL)The Treasury (i.e., the IRS)And with In-put from the National Association ofInsurance Commissioners (NAIC)
  8. 8. An Explanation Was Ordered ofHow the New Law Will WorkIn an effort to gain some understanding of thenew health care law, Congressman KevinBrady, R-TX, directed his staff to prepare asummary of the law, to include a Flow Chartthat would illustrate how the major provisionswill work . . . Following is their Chart!
  9. 9. PPACA aka - Affordable Care Act There are new fees, bureaucracies, and programs to pay for what it created- 159 new entities in all! ▪68 Grant Programs ▪47 Bureaucratic Entities ▪29 Pilot Programs ▪6 Regulatory Systems ▪6 Compliance Standards ▪2 Entitlements
  10. 10. PPACA Undermines theConcept of InsuranceThe purpose of insurance is to protect you froma Huge, Unlikely, and Unpredictable expense.You pay a small premium up front, and inreturn, the insurer agrees to pay for a massivecost that will probably never be incurred.
  11. 11. How Insurance is Suppose to Work If you purchase homeowners insurance for say, $500 per year, so that you will be reimbursed up to $300,000 for damages in the improbable event of a fire. Similarly, you could buy auto insurance for $600 per year so that your $50K car would be replaced in the unlikely event that it was "totaled" in an accident.
  12. 12. Health Insurance Mindset Today That is how insurance works for most things, but it is not how it works in the U.S. for most health insurance. Today people are spoiled as they have come to expect their health insurance to pay benefits for non-risk hazards such as Preventative Care and routine health care. That is a Major reason health Insurance costs so much today; because it now covers More than just Unlikely Events!
  13. 13. PPACA-Undermines the Very Concept of Insurance PPACA is more like Pre-Paying for Health Care than it is about making Health Insurance more affordable for the masses. PPACA prohibits the sale of insurance policies that do NOT cover all of its Mandates. So in essence, Health Insurance is now a financial vehicle used to pre-pay for Health Care that one may not want or ever expect to use. Put simply- That is Not the true purpose of Insurance!
  14. 14. The UninsuredThats What it Was Suppose to be All About! How Many Are There Really?
  15. 15. The Primary Reason for Health CareReform – Was to Cover the Uninsured Through out the health care debate, the "Majority Party" repeated ad nauseum that there were upwards of 46 million* people in America who lacked health insurance. insurance. *That figure comes from the U.S. Census Bureau, which reported in 2009, in its Current Population Survey (CPS) 2009, that the number of people without insurance rose from 45.7 million in 2007, to 46.3 million in 2008. 45. 2007, 46. 2008. The percentage of uninsured remained unchanged at 15.4%. 15.
  16. 16. Understanding Who is Uninsured . . .So who makes up those counted asuninsured in America?9.7 million or 21% earn more than $75K 21% 75K14 million are eligible for existinggovernment healthcare programs i.e.,Medicare, Medicaid, CHIP etc., but chose etc.Not to enroll
  17. 17. Understanding Who is Uninsured . . .Who makes up those counted continued- continued-6 million are eligible for employersponsored health insurance, but choseNot to opt-in their employers plan opt-5 million Recent "Legal Immigrants" werecounted (10.8%)5.2 million Recent "Illegal Immigrants"were counted (11.2%)
  18. 18. Understanding Who is Uninsured . . . Assuming some overlap with the numbers, there are at most 10 million U.S. Citizens without health insurance, which is a Much Less Scary Number than 46.3 million! 46. So the "Reform" to help 3% to 4% of the Population will affect approximately 90% of the population* 90% *Congress Allowed Exceptions- for Religious Reasons! Exceptions-
  19. 19. The Timeline for Implementing Reforms Beginning 23 Sept 2010 through 2018
  20. 20. PPACA - Reforms in 2010▪No lifetime benefit limits1 -based on dollar amounts▪No coverage rescissions/cancellations2 -except for fraud or intentional misrepresentation▪New internal and external appeal processes31Always available as an option, for a correspondingly higher premium2Already covered under a 1997 law3 Many insurers already had external appeal process in place
  21. 21. PPACA - Reforms in 2010▪ Must have dependent coverage up to age 26▪ No pre-existing condition exclusions for dependent children▪ No cost-sharing for preventative services▪ All employers must include on their W-2s the aggregate cost of employer-sponsored health benefits▪ $250 rebate for Medicare members who reach the ‘Donut Hole” in the Prescription Coverage
  22. 22. PPACA Reforms in 2012 All plans must provide new summary of benefits to enrollees at specified times. – Can be no more than 4 pages in length – Must be cultural and linguistically appropriate
  23. 23. Summary of Changes to PPACA— PPACA— First Anniversary EditionMarch 2011 marked the one-yearone-anniversary of the Affordable Care Actbeing signed into law. As Health Care law.Reform leaves its first year behind,heres a look at seven key changes tothe provisions affecting employers andemployer-sponsoredemployer- group healthplans under the Affordable Care Act. Act.
  24. 24. Changes Announced in April 2011Repeal of Form 1099 Filing Requirement The requirement that businesses report on Form 1099 all purchases of goods and services of $600 or more annually is repealed. repealed.
  25. 25. Changes Announced in April 2011Elimination ofFree Choice Voucher RequirementThe requirement that employers offeringhealth insurance coverage provide "freechoice" vouchers to certain employeesfor purchasing health care through state- state-based Exchanges, beginning in 2014, is 2014,repealed as part of the Department ofDefense and Full-Year Full- ContinuingAppropriations Act of 2011. 2011.
  26. 26. Changes Announced in April 2011Early Retiree Reinsurance ProgramStops Accepting New ApplicationsEffective May 6th, 2011- the Early 2011-Retiree Reinsurance Program (ERRP) willno longer accept new applications due tothe availability of funds.
  27. 27. Changes Announced in March 2011 Relief from Reporting Employer-Sponsored Employer- Health Coverage on Form W-2 W- The IRS provided further relief for smaller employers filing less than 250 W-2 forms by W- making the requirement to report the cost of coverage under an employer-sponsored group employer- health plan on Form W-2 optional for them at least W- for 2012 (continuing until further guidance is issued). This requirement, set to begin in tax year 2011, was previously made optional for all employers in 2011 last fall.
  28. 28. Changes Announced in March 2011Enforcement Grace Periods for Select InternalClaims and Appeals ProceduresThe Department of Labor further extended theenforcement grace period for select new standards forinternal claims and appeals processes until plan yearsbeginning on or after Jan. 1, 2012. Jan. 2012.The Affordable Care Act required non-grandfathered non-group health plans beginning a new plan year on orafter Sept. 23, 2010, to implement an effective Sept. 23, 2010,internal appeals process for coverage determinationsand claims. The enforcement of certain standards was claims.previously delayed until July 1, 2011. 2011.
  29. 29. Changes Announced in December 2010Nondiscrimination RequirementsDelayed for Insured Group HealthPlans - The IRS delayed the requirementthat non-grandfathered insured group non-health plans comply with the prohibitionon discrimination in favor of highlycompensated individuals, for plan yearsbeginning on or after Sept. 23, 2010, Sept. 23, 2010,until after regulations or otheradministrative guidance of generalapplicability has been issued (so anysanctions for failure to comply currentlydo not apply). apply).
  30. 30. Changes Announced in November 2010Group Health Plans May ChangeHealth Insurance Issuers WithoutLosing Grandfather StatusAn amendment to the original interimfinal regulations allows employers tooffer the same level of coverage througha new issuer and remain grandfathered,so long as the change does not result insignificant cost increases, a reduction inbenefits, or other prohibited changes. changes.Previously, one of the ways a grouphealth plan could lose its grandfatherstatus was if the employer changed
  31. 31. PPACA Changes Medicare Too!Mostly by Reductions in Funding
  32. 32. Medicare Will Fund More ThanHalf the Cost of PPACA! According to the CBO, PPACA will cost $938 Billion over the next decade. So, Who is going to pay for it? – Medicare Recipients! PPACA will cut Medicare by $575 Billion over ten years* according to Centers for Medicare and Medicaid Services (CMS).*Data available at- http://www.cbo.gov/
  33. 33. CBO Letter to Senator Reid- re: Medicare Cuts to Fund PPACA Reid-
  34. 34. PPACA- Seniors Hit Hard*Medicare Actuary Rick Foster confirmed that thehealth overhaul law will result in "less generousbenefits packages" for seniors on the popularMedicare Advantage program and that thecoverage will cost them more. Foster estimatesseniors costs will go up by $346 in 2011 and asmuch as $923 by 2017.*As reported by Grace-Marie Turner, The Galen Institute; October 22, 2010
  35. 35. Government MandatesBenefits that Must be Included in All Health Insurance Policies
  36. 36. Government Minimum CoverageMandates, Cause Maximum Cost Government regulations governing health insurance dictate what people can buy and cannot buy by implementing a series of Mandates i.e., benefits that policies Must Cover; whether you want them or not. The Result- It is generally accepted that the "mandates" are a primary reason many Americans cannot afford health insurance.
  37. 37. The Number of Government MandatesIs Ever Increasing! In 1979, there were just 252 mandates in place through out the U.S.- for an average of 5 Mandates per state. Fast Forward to 2009, there were 2,133 mandates through out the U.S.- for an average of 42 per state. Today, thanks to PPACA, there are several more mandates- and More Costly Ones at that!
  38. 38. PPACA-Mandates Preventative Care at "No Cost!" PPACA Mandates that all insurance policies not only cover preventative care, but cover it completely- there can not be any cost sharing whatsoever! In other words, insurers can no longer have co-pays for preventative care.
  39. 39. Examples of Government Mandates forHealth Insurance Policies* In vitro fertilization Contraceptives Breast Reduction Surgery Acupuncture Hormone Replacement Therapy Addiction Counselors Mental Health Parity*Varies by state
  40. 40. Why Mandates Dont Make SenseOne Size Does Not Fit All! Not everyone wantsall that coverage; certainly not a 25 year oldinvincible young man entering the work forcewho would be required to contribute a couplehundred dollars a month for coverage he wouldnot use.The average, Added Cost for Mandates beforePPACA was estimated to be over 10%!
  41. 41. The Great Grant Give-Away Give-PPACA Authorizes 100s of Million$ in Discretionary Grants by HHS
  42. 42. HHS Grants So Far in 2011
  43. 43. HHS Grants 2011 Continued
  44. 44. $40 Million Grant for Prevention Programs
  45. 45. HHS Awards $159.1 Million, to Support Health Care Workforce Training
  46. 46. Waivers?Which part of PPACA authorizedWaivers? . . . Were still looking!
  47. 47. Congressman Ryan: Waivers "A Devastating Indictment" Of Healthcare Law . . . CQ (5/17, 17, Adams, SubscriptionPublication) reports, "House BudgetChairman Paul D. Ryan defended hisMedicare proposal and criticized thehealth care overhaul Monday, sayingthat more than 1,300 waivers fromrequirements for insurers to increaseannual coverage limits are a devastatingindictment of that law." His "comments law.about the waivers come shortly after theCenters for Medicare and MedicaidServices (CMS) had released an updatedlist of companies and other entities thathave been exempted from the annual
  48. 48. Nevada Receives Health Reform Waiver The Las Vegas Sun (5/17, Demirjian) 17,reports, "Nevada got a partial waiverfrom the health care law -- a significantdevelopment that Democrats aredismissing as par for the course andRepublicans are claiming as a politicalvictory.victory." HHS announced Friday thatNevada "had secured a statewide waiverfrom certain implementationrequirements of the Obamaadministrations health care law,because forcing them through, thedepartment found, may lead to thedestabilization of the individualmarket.market." This announcement makes
  49. 49. Nursing Home Industry Seeking Waiver From Healthcare Law The National Journal (5/17, Fung, 17,Subscription Publication) reports,"Officials for trade groups representingnursing homes are asking the Healthand Human Services Department for awaiver that would allow the facilities notto provide health insurance to theiremployees.employees." Notably, "the AmericanHealth Care Association, a trade groupfor nursing homes, is lobbying to get anexemption from the measure. AHCA measure.President Mark Parkinson said thatnursing homes depend on Medicare andMedicaid for revenue, but the programs
  50. 50. HHS Secretary Scolds Insurers . . . "Dont Blame PPACA for Rate Increases!"
  51. 51. PPACA Already Causing HigherPremiums and Most Likely Less Medical Care in the Future!
  52. 52. Under PPACA- Medicaid Will Expand PPACA- Likely Causing Your Premiums to Increase!It has already been reported manytimes in the press from severalsources, that the expansion ofMedicaid will most likely causeinsurers to charge private plans more,in order to compensate for what theyview as under reimbursement byGovernment Plans. Plans.
  53. 53. The $6-an-Hour Health Minimum Wage* $6-an- Wage* Most people intuitively know that the worst thing government can do in the middle of the deepest recession in 70 years is enact policies that increase the expected cost of labor. Yet that is exactly labor. what happened last spring, with the passage of the Affordable Care Act. Act. How bad is it? Right now we’re estimating the cost of the minimum benefit package that everyone will be required to have at $4,750 for individuals and $12,250 for families — understanding that the 12, proclivity in this Congress and in this Department of Health and Human Services is to add benefits, not reduce them, making the package even more expensive. That translates into a minimum expensive. health benefit of $2.28 an hour for full time workers (individual coverage) and $5.89 an hour (family coverage) for fulltime employees. employees.*As reported by John Goodman, National Center for Policy Analysis; October 18, 2010 Analysis; 18,
  54. 54. PPACA- PPACA- Keeping Employers from Hiring* Job-killing mandates: The U.S. Job- mandates: Chamber of Commerce said that nearly eight in 10 small business leaders expect their costs to increase as a result of the new law. Many are law. fearful of the impact of new health insurance mandates, and the majority say they will be less likely to hire new employees and more likely to reduce current benefits. benefits.*As reported by Grace-Marie Turner, The Galen Institute; October 22, 2010 Grace- Institute; 22,
  55. 55. PPACA- PPACA- Already Causing Loss ofGroup Sponsored Health Insurance* Millions losing coverage: coverage: ThePrincipal Group announced it plans todrop health coverage for 840,000840,policyholders;policyholders; millions of seniors willlose Medicare Advantage plans; child- plans; child-only policies already are vanishing fromthe market because of HHS rules; rules;retirees are losing supplementalcoverage;coverage; and major employers suchas AT&T, Caterpillar, John Deere,Verizon, and countless others areconsidering dropping health benefitsover the mid- to long-term. mid- long-term.
  56. 56. McKinsey: One-third of employers One- will drop health coverageAn early-2011 survey of more than 1,300 employers by early-McKinsey & Company found 30 percent of respondents will"definitely" or "probably" stop offering employer-sponsored employer-health insurance after 2014. 2014.According to the June 2011 McKinsey Quarterly, health care Quarterly,reform "fundamentally alters the social contract inherent inemployer-employer-sponsored medical benefits and how employees valuehealth insurance as a form of compensation." compensation.By guaranteeing the right to health insurance regardless ofmedical status, reform minimizes any moral obligation employerswould feel to cover the sickest employees, who would otherwisebe denied coverage. coverage.JUNE 7, 2011; BY JENNY IVY, managing editor for IVY,BenefitsPro.com
  57. 57. Some of What We Did Not Discuss– Pennsylvanias PPACA Guaranteed Issue Plans– The Exchanges– Mandatory Coverage– Medicare Changes and Cuts– Community Living Assistance Services & Support– Several New Taxes– Penalties for Non-compliance Non-– Subsidies for Low Income Individuals– Who is going to pay for all this New Coverage?
  58. 58. Do You Believe PPACA is Good for . . . You and your family? The American Workers? Our Countrys Small Employers? The Country in General?
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